Can one agency do it all?

The mantra of the past decade has been totally integrated marketing.  It’s a very smart move.  Corporations have recognized the advantages of having all their marketing efforts synchronized and harmonized.

Agencies have recognized this, too.  Because it represents an opportunity for them to get a large slice of the client’s marketing budget.  In theory, an agency that provides integrated marketing communications can benefit by capturing spending that would go to digital agencies, brand consulting firms, PR firms, packaging firms and so on.

The theory is one thing.  The practice is another.

Our research shows that only 16% of marketing decision makers want to have a single agency partner to handle all of their marketing challenges.  Instead of working with fewer agencies, corporations are working with more agencies.  The integration of marketing has to happen internally at the client side.  The client must own and control their branding.

Branding agencies slow to adapt to new media

As promised in the last post, I am sharing the ratings of branding agencies on a variety of measures from overall quality of work to creativity, from innovation to the level of understanding the client’s brand.  While advertising agencies ranked last and branding agencies first, there wasn’t really much difference between them (5% vs. 11% respectively).

The headline is that branding agencies are seen as slow to adapt to multi-platform communications.  In the one of the top 3 priorities of marketers– integrating new media and traditional — branding agencies are lagging behind.

This data has never been published before.  It is from a study Verse Group commissioned with Jupiter Research among CMOs and marketing executives at 101 corporations.

A word of caution — the ratings that follow are for branding agencies without naming names.  Marketing executives were asked to rate their agencies but were not asked for the name of their agency(ies).

The short answer is that branding agencies are only moderately strong on our area of expertise — understanding the client’s brand.  33% of marketers rate their branding agencies as “excellent” in understanding of the brand.  Another 47% rated their brand agency as “good” on the same question.  Are clients saying that some of us brand gurus and experts are not as expert as advertised?

As Jupiter Research put it, “Agencies show moderate understanding of brands; missing opportunities in many areas.”

The biggest gaps are in very important areas — innovation, breakthrough approaches, integrating new and traditional media, working well with other agencies.

If the branding experts — the brand consultants — aren’t innovating and creating new marketing techniques, then who will?  That leaves it to academics and to corporate marketers to take the lead on reinventing marketing.

Here’s the chart:

Marketers rating branding agencies/brand consultants

Are agencies delivering on client needs?

In the past year or so we’ve been hearing from some marketing executives that they aren’t getting the quality of work that they demand from their agencies.

To answer that, we did with Jupiter Research.  In it, 45% of CMOs and other marketing executives say it is taking more time and effort to manage their agencies than 2 years ago.  One contributing factor is that corporations tend to have more agencies than in the past.  To their roster of advertising, pr & branding agencies they have been adding interactive agencies, specialists in social media, CSR specialists, event marketing and so on.

With all of these agencies, it is more difficult to get great work.  In fact, only 5% of marketers rate the quality of work from their advertising agencies as “excellent”.

It’s only slightly better for PR, Direct Marketing, Interactive and Brand Consulting agencies.

Here’s the data:

Marketers rating quality of work of their agencies

You can also download it in pdf format:  Verse_CMO_AgencyRating_Sept2009

Next post a focus on branding agencies in particular

What is so different about Narrative Branding?

It can be summed up easily.  Narrative Branding is an inductive approach.  Brand positioning is a deductive approach.  

Inductive is showing people a painting and evaluating how much it engages people.  

Deductive is asking people what kind of painting they want to see and then painting it.

Now that might need a little more explanation.

In Narrative Branding we bring new narratives to your audience — consumers, customers, employees.  Yes, it begins with audience.  What we are looking for are the metaphors that resonate strongly with your audience and the stories that they tell.  We do not expect them to provide “the answer” at that point.  From there we create new narratives for the brand by imaging the future.  Then we use market research to see which narrative is the most engaging and compelling.  

Traditional brand positioning begins with deducing what is important to your audience by assessing the world as it is today.  You also want to assess how people view the competition.  From that you isolate 2, 3 or 4 attributes which are both important and different from the competition.  The last step is to put those attributes into a verbal positioning statement that is researched, although the words in the final statement are not mean to be used in the marketplace.  Then the positioning statement is handed over to the creatives who are responsible for translating these attributes into the new branding.  

We can go back and forth all day about the merits of one method vs. another.  At the end of the day we come back to the fact that 63% of CMOs and other marketing decision makers want a method that is more effective than brand positioning.  

Marketers unsatisfied with brand positioning

 

And that those who are looking for better methods are much more likely to be using or exploring the use of brand stories and storytelling.  

Marketers are embracing brand stories

This is not my opinion.  This is not the opinion of another branding expert or a branding agency.  This is the opinion of marketers who use these methods. And theirs is the opinion that counts.  The evidence is in the JupiterResearch (now Forrester Research) study conducted six months ago.

Reinventing marketing

Who will lead the way in reinventing marketing?

Only 16% of CMOs believe it will be their agencies!  Only 16% of  CMOs believe that their agencies are bringing the leadership necessary to look across all of marketing.

Frankly I was surprised that the number was even that high.  

And yet, there is every reason for agencies to be at the forefront in reinventing marketing.

Because they work across many different companies and industries, agencies are ideally situated to have a broad overview of marketing.  From this perspective they have the potential for reinventing marketing.  And because they are outsiders, in theory they can provide an objective and independent viewpoint that is not entwined with the internal politics and vested interests of any particular company.

CMOs don’t see it that way because their agencies don’t see it that way.

Most agencies have their own vested interests in the status quo of marketing.  The areas that they have an interest in reinventing is around new media and moving from short 30 second ads to longer forms such as online movies.  

We came across this in our many years of being on the agency side.  

When I was a SVP at BBDO, I recognized a marketing opportunity for our Gillette clients to support their efforts to get men to trade up from disposable razors to the Gillette Sensor XL.  I developed the marketing concept and brought it to the client because it was good for their business.  Back at the agency my effort was seen as a waste of time.  “Where is the advertising in this idea?” asked the head of the account group.  

And I found the same silo thinking at other types of agencies over the years.

In developing our method for reinventing marketing — Narrative Branding — Michael Thibodeau and I recognized the difficulty in getting an existing agency to adopt a whole new model.  You know the saying, you can’t teach an old dog new tricks.  The disruption for an existing agency would be too great.  That is why we started Verse Group.

What’s up with all these sound-alike branding firms?

Someone I know and respect recently joined a branding firm, so I went to their site to check them out.   What did I find there?

I found the same things that I find at nearly all other branding firms.  I was particularly fascinated by the way they all seems to be using the same language.  The following 4 examples were culled from the home pages of 4 different branding firms. Can you guess which phrase goes with which branding firm?  Can you do it without using Google?

1. “Creating brands that transform business.”

2. “Create value”

3. “Building strong brands that drive revenue and create financial value”

4. “Creating and managing brand value”

Every one of these firms goes on and on about the need for brands to stand apart  in the market, to have an ownable point of differentiation.

In fact one of the firms features a new whitepaper they have written about “Differentiation in a Downturn”

Here are some of their key points:

• To prevent your differentiation from disappearing overnight, keep in touch with your customers and understand their needs and concerns
• Brand attributes and assets that may be cost of entry in good times become more important as customers look for reassurance from companies they can trust.
• Cut away neutral brand assets and attributes that have no measurable on your brand’s bottom line.
• If your brand is in a rut, take the long-term view; but if you follow tips 1-3 you might be able to stop your brand’s decline before it’s too late.

To all of these firms I say, “Eat your spinach!”  If you really believe in differentiation, then why don’t you practice it?  

Oh, and the answers are:

1. Landor

2. Lippincott

3. TippingSprung

4. Interbrand

What Sam Spade has to say about branding

In my home we are on a years long project to work our way through the high points of movies since the advent of the Talkies.  Getting anyone here to watch a black & white movie is challenge enough, so I’ve given up hope of showing the older silent greats.

Recently we watched The Maltese Falcon.  If you haven’t seen it, you must.

Here’s the key thing to watch for in the movie — the metaphor.  

Why?  Because at the heart of every great brand is a strong metaphor.The metaphor takes on layer after layer of meaning over time.  By using the metaphor in different contexts, it can have great power.

So back to the film noir classic, The Maltese Falcon.  Our anti-hero is Sam Spade, archetype of the hard-drinking, womanizing, private-eye.  The action begins when Spade’s partner is bumped off.  As Sam Spade sets off to find the person who killed his business partner, the black bird takes on layer upon layer of meaning.  What is that beautiful black bird?  It is the endless quest for the Holy Grail.  It is the greed that twists humanity.  It is a metaphor, symbolic language.  

It is a great example of how a metaphor can have great power over people.  And not just the characters in the movie.  Think about all of the people who have been emotionally hooked by this movie.  How Sam Spade and that beautiful bird have entered our sphere of personal stories.

So what does Spade have to say about branding?

It is, in the words of Sam Spade, “The stuff dreams are made of.”

Chariots of Fire and Branding

On New Year’s Eve we settled in to watch the old movie Chariots of Fire.  Oh, it’s been quite some time since I last watched it.  But the teenagers in our home had never seen it before.  And with one of them running Track, it seemed like the right kind of inspirational movie to kick-off the New Year.

Briefly, the movie is about two runners in the UK, Harold Abrahams and Eric Lidell, preparing for the 1924 Olympics.  They are both undefeated in running until they meet each other.  In that pivotal race, Abrahams loses to Lidell.  Abrahams then turns to a professional trainer who reveals the importance of reaching for the tape, not watching out for the other runners.   The winners keep their eyes on the prize (to borrow from the old folk song) and not on the competition.

In other words, when you are running from the front, your odds of winning go up when you keep your eyes on the ultimate goals.  But if you are wasting energy judging your position vs. your competition, you may lose.

So what does this have to do with branding?  

It is a useful analogy for how Narrative Branding (R) is helping companies win, while brand positioning is misspending resources by focusing on the competition.

Consider for a moment the standard practice of brand positioning.  It is all about jockeying for relative position.  A brand is defined by its position vs. other brands.  Corporations spend much time and money defining themselves in contrast to their competitors.  This is known in branding patois as “differentiation.”  What makes my brand different from my competitors?   This is like the mistake that Abrahams made in his race against Lidell.  Abrahams was focused on Lidell.  But Lidell was focused on the finish line and got there first, without wasting energy looking at Abrahams.

Applying this analogy more fully to branding suggests that corporations are best when they focus on the desires of their audience.  They are more likely to create a compelling narrative with strong metaphors in that situation.   The brand and the audience co-create meaning together.

And branding is at its worst when it is too conscious of the competition’s brands.  It becomes a conversation between brands.   Each is looking over the shoulder at the other.  Each assumes that the other corporation is gaining some edge or has some special insight into their brands.  Each brand is defined relative to another brand and not relative to the desires of the audience.  They are conversing with each other, not engaging with the audience. The race for “differentiation” all too often becomes circular, insular.   The audience is a spectator at best.  And then the audience moves on, ignored.  

Now this doesn’t mean a corporation should completely ignore the competitor’s brand.  To do branding well, you need to have some sense of the other brands.  It should be a secondary consideration, not a primary one.

This lesson was absorbed by Abrahams as he focused on preparing for the big showdown in the Olympics.  

We paused the movie shortly before midnight, switching back to the local channels instead to watch the ball drop in Times Square.  Outside our windows we heard the fireworks going off in Central Park as the midnight race began.

Consistency vs. coherence in branding

“Do I contradict myself?  Very well, then I contradict myself.  I am large, I contain multitudes.”  Walt Whitman 

Consistently we are lectured about the need for brands to be consistent.  They need to look the same everywhere.  They need to say the same thing everywhere.  They need to act the same every time.  The brand needs to say the same thing to all audiences.  That is one of the core principles of the  brand positioning theory.  A brand can only stand for one thing.  

In fact, in the current issue of Ad Age, Al Ries says “Almost every successful brand in the world started as a narrowly focused brand that stood for a single idea.”  And he goes on to say that brands need to narrow what they stand for.  They can stand for one thing and one thing only.  http://adage.com/columns/article?article_id=133561

Yet 87% of marketing decision makers say that branding needs to be more flexible today because business is more dynamic and fast moving.  (This is from new research we conducted with JupiterResearch.  You can download the full study, Shifts in Marketing at www.versegroup.com)

Here the brand positioning theory directly conflicts with the needs of marketers.  

Something has to give.  Should the needs of marketers bend to the theory of brand positioning?  Or should marketers look for another model of branding?

I am simplifying the matter here.  But the clear answer is that the needs of marketers must align with the branding method they are using.  That is where Narrative Branding (R) has an advantage over brand positioning.  Narrative Branding recognizes that the brand needs to evolve, to tell different parts of the brand story to different audiences.

To be clear, this post is not suggesting that brands should be contradictory.  Certainly nobody  is advocating for a brand to contradict itself.  Unless, of course, their brand is Walt Whitman or maybe even Alan Ginsberg.

A narrative approach to branding replaces the idea of “consistency” with the idea of “coherence.”  A brand needs to share its story to several audiences.  Customers, perhaps several different segments of customers.  Employees, investors, business partners.  These different strands or narrative threads must be coherent.  They need to complement each other.  They need to add up to the larger narrative of the brand.  

Certainly we do this as people.  

Consider New Year’s Eve.  Several people asked me about my New Year’s Eve, and I told each of them a different facet of that evening.  I told my sister about watching the movie, Chariots of Fire, because we both have a love of running.  To my friend Madeleine, I spoke of being home and playing Taboo and other games.  They each learned different facets of my evening.   My conversations with them were rich and engaging.  Had I told them both the same story, I would diminished myself, I would become one dimensional.  I am not as large as Walt Whitman, so I cannot afford to contradict myself.  But I am not as limited as brand positioning would have me.

The same is true for a brand.

The resilience of McDonald’s

McDonald’s is one of the few stocks that actually increased in value during 2008 — a year in which 95% of stocks fell.  Not only that, but sales have continued to grow.  The strength of McDonald’s is amazing! 

Is this simply because a lower cost restaurant will do better in a recession?  If we look at the last recession, the stock price of McDonald’s actually fell rather dramatically.  So it cannot be only the greater economy that is driving McDonald’s performance.

If we look back, we can see that McDonald’s actually began this decade in rather tarnished shape both as a business and a brand.  As a brand it had lost relevance and trust.  In the last recession McDonald’s was weak and in this one it is strong.  In fact, today McDonald’s is one of the strongest businesses and brands in the world.  Remarkable!

How did this happen?  

The changes began at the top, with new leadership.  One of the most important hires, and most counter-intuitive, was bringing Larry Light on as the Chief Marketing Officer.  Larry Light had a storied history working at the advertising agencies BBDO and Ted Bates.  Bringing in someone with that background was unconventional for McDonald’s.

To turn around the McDonald’s brand, Light jettisoned traditional brand positioning.  He was prescient in seeing the traditional brand marketing model as being broken.  In his own words, “We reject the outmoded view of the positionistas… declaring an end to the out-of-date, simplistic concept of brand positioning…”

Light’s great insight was that brand positioning was too limiting for the McDonald’s brand.  It narrowed the potential audience for the brand down to a single market segment.  For the brand to grow, it needed to appeal to many segments of the market, not just one.

He needed a new model for brand marketing.

Always resourceful, Light developed a narrative method for brand marketing.  He called it “Brand Journalism”  It was custom made for McDonald’s.  It was far, far more than just an advertising campaign.  It was the basis for rebuilding the internal culture of McDonald’s, for shaping the company’s business strategy, for changing menus and for redirecting their overall marketing efforts.  Because it was a new model, it also required developing new market research tools and metrics.  Existing market research was designed to assess the key elements of brand positioning.  It was not appropriate for assessing a brand based on the principles of  brand journalism.

“McD’s Abandoning of Positioning is ‘Lunacy'” screamed the headlines in AdAge.

Less than a year later the magazine changed their mind.  AdAge awarded McDonald’s “marketer of the year.”  A turn around indeed! 

Brand Journalism is, at its heart, a narrative method for creating and managing a brand.  The full story of it and McDonald’s turn around remains to be written.

This narrative method is part of the reason why McDonald’s continues to be so resilient today as both a brand and a business.